3 Personal Loan Lenders You Won’t Scare Off with Fair Credit
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A fair credit score is 580 to 669, according to the FICO credit scoring model. This model is commonly used by all types of lenders to help assess your loan eligibility. If you have a score that falls within the fair credit range, it can be difficult for you to qualify for a personal loan, and you may have trouble securing competitive terms and avoiding origination fees.
However, you can still find a lender that matches your borrowing needs. To help you find the best personal loan for fair credit, we’ve compiled a few lenders below for you to consider.
5 best personal loans for fair credit
How to shop personal loans with fair credit
5 best personal loans for fair credit
The below lenders offer personal loans for fair credit borrowers:
Compare these fair-credit personal loans
Loan company
Min. credit score
APR
Term
Loan amounts
Avant
600
9.95% – 35.99%
24 to 60 months
$2,000 – $35,000
Best Egg
700
5.99% – 35.99%
36 or 60 months
$2,000 – $50,000
LendingPoint
585
7.99% – 35.99%
24 to 72 months
$2,000 – $36,500
Payoff
640
5.99% – 24.99%
24 and 60 months
$5,000 – $40,000
Upstart
600
4.37% – 35.99%
36 or 60 months
$1,000 – $50,000
1. Avant: Minimum 600 credit score
Avant has flexible personal loan requirements and it considers applicants who have a 600 credit score or higher. Additionally, Avant has no set income requirements for its personal loans.
You can get small personal loans from Avant, with amounts ranging from $2,000 to $35,000. Loan terms range from 24 to 60 months. Avant does charge an origination fee (Up to 4.75% of the loan balance). This fee is deducted from your loan amount.
2. Best Egg: Minimum 640 credit score
Best Egg offers personal loans to borrowers who have a 700 credit score or higher. Almost half of Best Egg customers receive their money the next business day, making this a great option for quick loans.
Depending on which state you live in, you can borrow from $2,000 to $50,000; loan terms range from 36 or 60 months. You can use the funds from your loan to consolidate debt, pay for a vacation, help with moving expenses and more. Best Egg charges an origination fee that ranges from 0.99% – 5.99% — the fee reduces your loan amount.
In addition, Best Egg loans have no prepayment penalty, meaning you can pay the loan off as soon as you want.
3. LendingPoint: Minimum 585 credit score
LendingPoint welcomes borrowers who have 585 credit scores or higher. According to the lender’s website, a decision to approve or deny your loan can be made in a few seconds and the funds can be sent on the next business day.
LendingPoint loan amounts range from $2,000 to $36,500; loan terms range from 24 to 72 months. Depending on the state you live in, an origination or other fee of 0.00% – 7.00% may apply. If you’re charged an origination fee, the lender gives you the option to deduct it from your loan amount.
4. Payoff: Minimum 640 credit score
Payoff personal loans are available to applicants who have at least a 640 FICO score. You can only use its personal loans to refinance or consolidate credit card debt.
The amount you can borrow ranges from $5,000 to $40,000. Loan terms range from 24 and 60 months. If you’re approved for a Payoff personal loan, you may incur an origination fee ranging from 0.00% – 5.00% of the loan amount.
However, you won’t encounter any other fees with a Payoff personal loan — it doesn’t charge for common fees, such as prepayment fees, late fees and returned check fees.
5. Upstart: Minimum 600 credit score
Upstart welcomes applications from borrowers with a credit score as low as 600. According to the lender’s website, 99% of its loans are funded the next business day after you accept the loan.
Upstart personal loans allow you to borrow $1,000 to $50,000 and offer terms of three and five years. The lender charges an origination fee (0.00% – 8.00%) that is taken from your loan proceeds and can reduce your loan amount. If you need to borrow the full amount to consolidate debt or fund a home improvement project, this can be a huge drawback.
How to shop personal loans with fair credit
Follow these tips to help you find the best personal loan for fair credit for your situation:
1. Learn what factors lenders look for when you apply
Before you apply for a personal loan for fair credit, it’s a good idea to check your credit score to see if you fall within the fair credit score range or meet the lender’s minimum credit score requirements.
Afterward, you should review other factors lenders typically consider when reviewing your application, such as your …
- Credit report and payment history: Your credit report lists your payment history — lenders use this report to assess how good you might be at managing your debts. If you have any negative information listed on it, it can harm your credit score. Make sure your report contains accurate information. You can request a free copy of your report with each credit bureau weekly at AnnualCreditReport.com.
- Income: This is how much money you have coming in that you can use to repay the loan. Lenders also might consider your employment history, career field or educational attainment.
- Cash flow: This is the money going out. It might be measured by your debt-to-income ratio or by looking at your fixed housing costs, such as your rent or mortgage. Lenders will want to make sure you’ll have enough left over each month to reasonably keep up with your loan’s monthly payments.
Lenders will gather these details through the underwriting process once you apply. They’ll use them to create an overall picture of your financial resources and behavior, and estimate how likely you are to repay the personal loan.
2. Review different lenders
The five lenders above are a good starting point for your personal loan search. But other lenders provide personal loans for fair credit, too. You can find other lenders by searching online, such as in our loan marketplace linked above. Once you find a lender you like, carefully review their terms and fee structure.
Check with different types of lenders, from online personal loans for fair credit to major banks and local credit unions. Each lender will have its own perks and drawbacks:
Pros and cons of various lender types
Lender type
What it is
Pros
Cons
Bank
For-profit institution that usually has physical branches you can visit
● May have better technology for borrowers to use
● Can communicate face-to-face with a loan officer
● Might have stricter borrowing requirements
● Rates may be higher than online options
Credit union
Not-for-profit, member-owned financial institution
● May offer lower interest rates than banks
● Can be easier to qualify for
● Must be a member to apply for a personal loan
● Might not have updated technology for borrowers to use
Online lender
For-profit financial institution that exists only online and has no physical location
● May have lower rates than both banks and credit unions
● You can apply from anywhere
● No face-to-face support
● Borrowers with poor to fair credit scores may be charged higher rates and fees
Peer-to-peer lending marketplace
An online marketplace that connects borrowers with investors that may fund their loans
● You can apply from anywhere
● May have fewer documentation requirements
● May take longer to fund your loan, since it is funded by individual investors
● Might encounter higher fees
3. Get and compare personal loan rate quotes
Once you have a few top picks, prequalify with the lender, if you can. When you prequalify, the lender gives you a custom rate estimate for a personal loan, which might include different loan term offers, and should outline other costs, such as an origination fee. Comparing these personalized rates quotes will point you to the personal loan that is the best deal.
When comparing personal loan offers, consider such factors as:
- APR: The loan’s annual percentage rate gives you an accurate measure of how much it costs to take out a loan; it accounts for the interest rate, along with any fees the loan may have.
- Term: The term is how much time you have to pay back the loan. Choosing a loan with a longer term may decrease the monthly minimum payment; however, it can increase the amount of interest you pay over time.
- Loan amount: Different lenders have different minimum and maximum loan amounts. Before applying for personal loans for fair credit, make sure the lender offers the amount you need to borrow.
- Restrictions on use of funds: Although personal loans can be used for almost anything, some lenders restrict the usage of the funds. For example, some lenders might restrict the funds usage to consolidating or refinancing credit card debt or not allow you to use the money for education-related expenses or investing.
- Fees: Different lenders have different fees. Common fees include prepayment penalties, origination fees, late payment fees, returned check fees and application fees. All of these fees increase the borrowing costs of taking out a loan for fair credit.
- Time it takes to receive funds: While some lenders will issue your funds the next business day after approving your loan, others may take longer. If you need to access the loan funds fast, choose a lender that matches your time frame.
- Co-borrowers and cosigners: Having a co-borrower or cosigner fill out the loan with you can help you secure a better rate, if the other person has a better credit score or more income. Some lenders, unfortunately, do not allow you to complete a joint application.
4. Formally apply with a lender
Once you decide which lender fits you best, fill out an application online or in-person. Although the application process varies from lender to lender, you’ll most likely be asked to provide personal information, such as your name, date of birth, annual income and Social Security number.
Also, some lenders will require you to provide documentation, which may include tax returns and bank statements.
5. Await a final loan decision
If you’re approved for a personal loan for fair credit, the funds are usually deposited directly into your bank account. However, with some lenders, you can choose to send the funds directly to your creditors. In the event your loan is denied, the Equal Credit Opportunity Act requires the lender to provide you with an explanation. Before applying again, review the reason why. Also, check your credit report for any inaccurate or incomplete information.
Methodology:
Personal loan products were selected using the LendingTree marketplace with the following criteria: 1) $5,000 loan amount; 2) minimum fair credit score requirement; 3) loan purpose of debt consolidation. Only loan companies in the top 12 by lowest APR that list a minimum credit score on their website were selected. Loan companies in this article are listed in alphabetical order.
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